Chief Commissioner of Police v Nikolic

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0097

CHIEF COMMISSIONER OF POLICE	Applicant
v
DANIEL NIKOLIC	Respondent

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JUDGES:	MAXWELL P, OSBORN and KAYE JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	22 August 2016
DATE OF JUDGMENT:	14 October 2016
MEDIUM NEUTRAL CITATION:	[2016] VSCA 248
JUDGMENT APPEALED FROM:	[2016] VSC 333 (Ginnane J)

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ADMINISTRATIVE LAW – Judicial review – Procedural fairness – Racing industry – Statutory power to exclude person from race-courses – Decision-maker obliged to accord procedural fairness to person affected – Content of procedural fairness – Police intelligence information – Whether required to be disclosed – Public interest in integrity of racing – Public interest in investigation of criminal activity – Importance of statutory context – Whether statutory purpose would be frustrated – Disclosure not required – Appeal allowed – Kioa v West (1985) 159 CLR 550, SZBEL v Minister for Immigration and Ethnic Affairs (2006) 228 CLR 152 applied – Racing Act 1958 pt I div 5.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr R Niall QC, Solicitor-General for the State of Victoria, with Ms F Batten	Victorian Government Solicitors Office
For the Respondent	Mr R Merkel QC with Mr C J Tran	Lennon Mazzeo Lawyers

MAXWELL P
OSBORN JA
KAYE JA:

Summary

In November 2015, a delegate of the applicant (the ‘Commissioner’) made an order under s 33(1) of the Racing Act1958 (‘Racing Act’) prohibiting the respondent, Mr Nikolic, from entering or remaining at specified race courses during race meetings (the ‘exclusion order’). Mr Nikolic applied under the Administrative Law Act 1978 for judicial review of the Commissioner’s decision, on the ground that he had been denied procedural fairness[1] in the making of the decision.
[1]Whilst the ground of appeal was expressed using the phrase ‘natural justice’, the term ‘procedural fairness’ is used throughout these reasons.

On 16 June 2016, Ginnane J granted Mr Nikolic’s application for judicial review. His Honour concluded that Mr Nikolic had been denied procedural fairness in that he was ‘not provided with details of adverse allegations against him that were credible, relevant and significant’.[2] As a result, the decision to make the exclusion order was ‘invalid and of no effect’.[3]
[2]Nikolic v Chief Commissioner of Police [No 2] [2016] VSC 333 [6] (‘Reasons’).
[3]Ibid.

There was no dispute that the Commissioner was obliged to accord Mr Nikolic procedural fairness in the making of the decision. Rather, the question for determination was what content was to be given to that obligation in this statutory context and in the circumstances of this case.[4]
[4]Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82, 109 [60].

The key issue was the extent to which adverse information could be disclosed to Mr Nikolic without unreasonably prejudicing confidential police sources and/or ongoing police investigations and/or police investigative methods. The judge concluded that certain information and specific documents should have been disclosed to Mr Nikolic, and that this could have been done without prejudicing those other legitimate interests.

The Commissioner now seeks leave to appeal from the judge’s decision. He contends, first, that the judge misconstrued the applicable provisions of the Racing Act. In the alternative, the Commissioner contends that the judge erred in concluding that procedural fairness required that Mr Nikolic be given the information and documents in question.

For reasons which follow, we would reject the first contention but uphold the second. Having reviewed the information for ourselves, and considered the evidence as to its sensitivity, we have concluded that in this statutory context the non-disclosure of the information did not constitute a breach of procedural fairness.

The power to make an exclusion order is exercisable where the Commissioner ‘considers it necessary in the public interest’ to do so.[5] The particular public interest to which the power is directed is the maintenance of the integrity of the racing industry in Victoria and — to that end — the prevention, detection, investigation and prosecution of criminal activity which would undermine the integrity of the industry.
[5]Racing Act s 33(1).

As will appear, the legislature has expressly recognised that the information which will be relied on to support the making of an exclusion order is likely to include highly sensitive police intelligence information. Protection of such information from disclosure is viewed as being of such high importance that, quite exceptionally, the Court is authorised to withhold relevant information from a person the subject of an exclusion order who seeks (as Mr Nikolic has done) to challenge its validity in court proceedings.

Section 35E of the Racing Act makes express provision to that effect, authorising the Court — where necessary in the public interest — to proceed on the basis of information not provided to the person affected. As will appear, those procedures were invoked at the hearing before the judge.

This appeal does not concern non-disclosure to Mr Nikolic in the Court proceeding. Rather, as already mentioned, it concerns non-disclosure in the Commissioner’s process of decision-making under s 33, in respect of which no equivalent provisions were enacted. Nevertheless, the Court is obliged, in deciding what procedural fairness required in that process, to consider the full statutory context. We have concluded that the disclosure to Mr Nikolic of the information in question would frustrate the very purpose for which the statutory power was conferred, and hence that the Commissioner was not obliged to disclose the information to him.[6]
[6]Kioa v West (1985) 159 CLR 550, 586, 615 (‘Kioa’).

Accordingly, there will be a grant of leave to appeal and the appeal will be allowed. The order below will be set aside and in its place there will be an order dismissing the application for review.

As was the position at first instance, the reasons for decision are in two sections. The first — and much larger — section is unrestricted. In it, we have endeavoured to explain as fully as possible — by reference to the legal and factual framework — why disclosure of the information was not required. The second part, which is of necessity restricted, addresses the sensitivity of the particular information which was withheld from Mr Nikolic and the public.

The statutory framework

The following provisions of the Racing Act are relevant in this proceeding:

33       Exclusion orders by Chief Commissioner of Police
(1)The Chief Commissioner of Police may, if he or she considers it necessary in the public interest, by written order given to a person, prohibit the person from entering, or remaining at—
(a)       a specified race-course; or
(b)       two or more specified race-courses—
for the duration of a race-meeting at the race course.

(2)Nothing in this section empowers the Chief Commissioner of Police to make an exclusion order in respect of a person who holds a bookmaking licence or an occupational racing licence within the meaning of Part IIIC.

34 Duration of exclusion orders
An exclusion order remains in force in respect of a person until it is revoked by the Chief Commissioner of Police.

…
35B Excluded person not to enter race-course
A person who is the subject of an exclusion order relating to a specified race-course must not enter, or remain at, the race-course at any time during the duration of a race-meeting.
Penalty: 20 penalty units.

35C Notifying police of presence of excluded person
A steward who reasonably believes that a person who is the subject of an exclusion order is at a specified race-course at any time during the duration of a race-meeting, must notify a police officer as soon as practicable.

…
35E Procedure on application for review
(1)This section applies if an application is made to a court for review of a decision by the Chief Commissioner under section 33 to make an exclusion order.
(2)If the Chief Commissioner objects to the disclosure or production of protected information at the hearing of the application for review, the Chief Commissioner may apply before the hearing to the court to hear and determine the application for review―
(a)at a hearing at which evidence given by a police officer is given on the basis of a confidential affidavit that is not disclosed to one or more of the parties or any representative of those parties; or
(b)at a hearing held in closed court in which the Chief Commissioner and each party to the proceeding has a right to make submissions; or
(c)at a hearing held without notice to, and without the presence of, one or more of the parties or any representative of those parties; or
(d)by any combination of the methods set out in paragraphs (a), (b) and (c).

(3)If the court is satisfied that it is not in the public interest to hear and determine the application for review by the method elected by the Chief Commissioner, the court may hear and determine the application by any other method set out in subsection (2).
(4)In deciding which method to hear and determine the application for review, the court must take into account—
(a)the public interest in protecting the confidentiality of police investigative techniques and protected information in the possession of the police; and
(b)the extent to which the method of hearing and determining the matter may disclose any intelligence information, or document or thing the disclosure of which—
(i)reveals the identity of the police officer who provided information on the basis of which the exclusion order was made or puts that police officer’s safety at risk; or
(ii)reveals the identity of a person who has provided a police officer with information on the basis of which the exclusion order was made, or puts that person’s safety at risk; or
(iii)reveals the identity of a person whose name appears in any evidence given or information provided to a police officer relating to an investigation, or puts that person’s safety at risk; or
(iv)reveals the identity of a person who is or has been the subject of an investigation by a police officer, or puts that person’s safety at risk; or
(v)places at risk an ongoing investigation by a police officer; or
(vi)risks the disclosure of any investigative method used by police officers; or

(vii) is otherwise not in the public interest.

(5)If the court decides to hear and determine the application for review by the method set out in subsection (2)(a), the court may require the police officer to provide the court with any further confidential affidavits the court requires to determine the application.
(6)In this section protected information means any intelligence information, document or thing the production or inspection of which—
(a)is likely to reveal any matter referred to in subsection (4)(b)(i) to (iv); or
(b)is likely to place at risk an ongoing investigation by a police officer; or
(c)is likely to risk the disclosure of any investigative method used by police officers; or

(d) is otherwise not in the public interest.

The relevant circumstances[7]

[7]Paragraphs 14 to 28 are based on the reasons of the primary judge.

By letter dated 19 October 2015, the Commissioner’s delegate, Deputy Commissioner Patton, sent Mr Nikolic what was described as a ‘Notice of Intention to Make a Racing Exclusion Order’. In relevant part, the letter stated as follows:

By this letter, I am giving you notice that I am considering whether or not to make an order under s 33(1) of the Racing Act, prohibiting you from entering or remaining at all specified race-courses for the duration of a race meeting conducted at those race-courses. The purpose of this letter is to afford you the opportunity to offer submissions in response to this proposed order, should you wish to do so.
My preliminary view is that it is necessary in the public interest to make an exclusion order. I formed the preliminary view after having carefully considered information about you, as it relates to the public interest in protecting the integrity of the racing industry, and public safety and public order at Victorian race-courses and race meetings.
I base my preliminary view on the following matters:
1.The nature and extent of your proven criminal history in Victoria and New South Wales; particularly, in relation to your history of family violence and other violent criminal behaviour. My preliminary view is that this behaviour, which occurred both in and out of the context of racing, demonstrates a propensity for engaging in acts of violence and intimidation. Persons who have been affected by your behaviour include a jockey, other persons involved in the racing industry with whom you have contact, as well as members of the public not connected to the racing industry;
2.The nature and extent of your disciplinary history in your former profession as a jockey, including threats against a racing steward;
3.That on 11 June 2015, you entered a restricted area at Flemington Racecourse, namely the mounting yard and jockey’s room;
4.That on 4 October 2012, the then Chief Commissioner Ken Lay made a Casino Exclusion order in relation to you; and
5.I have also considered other credible, protected information which, for reasons of public interest, I cannot disclose to you.

It is my preliminary view that these matters establish to my satisfaction that you have engaged in conduct which has the propensity to adversely impact on the integrity of the racing industry in Victoria.
Should you wish to make any submissions that you consider to be relevant to my decision, you may address these matters to me in writing prior to 4.00 pm on 28 October 2015. I will take any submissions you make into account before making a decision.

Before replying, Mr Nikolic’s solicitors requested all of the ‘primary material’ taken into account by Deputy Commissioner Patton in reaching his view stated in the letter of 19 October 2015. They also sought particulars of factors on which he had based his preliminary view. Mr Nikolic’s solicitor submitted that he was entitled to know the substance of what was said against him and that the ‘protected information’ referred to should be disclosed in a fashion that did not offend the framework envisaged by s 35E of the Racing Act.

On 30 October 2015, the Chief Commissioner’s solicitor by letter stated that he would release to Mr Nikolic electronically all of the contents of the documents ‘which it would not be in the public interest to withhold’. That letter also stated:

[w]ith regard to the ‘protected information’ being considered, we are instructed that it would not be in the public interest to disclose even the general nature of that material.

The documents released ran into many pages, some of which were redacted or edited.

Having received these documents, Mr Nikolic’s solicitor responded to the Notice of Intention with a seven page letter and a 13 page statutory declaration by Mr Nikolic.

The exclusion order and the reasons

On 12 November 2015, Deputy Commissioner Patton signed the exclusion order. On 23 December 2015, following a request from Mr Nikolic’s solicitors, Deputy Commissioner Patton forwarded a statement of his reasons for making the order. In his reasons, Deputy Commissioner Patton said:

In considering the requirements of the public interest in this case, I had regard to matters that I considered to be relevant to protecting and preserving the integrity of the Victorian racing industry and the safety of racing industry participants and the general public who attend race-meetings at licensed racecourses.

The Deputy Commissioner also stated that he had considered the circumstances relating to Mr Nikolic’s criminal offending. He said:

in light of your criminal history, I am of the view that there is a risk to the integrity of the Victorian racing industry, and the safety of racing industry participants. These matters are, in turn, relevant to the question of whether it is necessary in the public interests (sic) to make an exclusion order.

And further:
In conjunction with your criminal and disciplinary history involving physical violence, verbal threats and intimidating behaviour, I have formed the view that you have limited appreciation of, or ability to control, your behaviour towards others, including racing officials and participants, family members, associates and the general public. Such conduct is in conflict with the high standards and the strict regulatory regime within which the Victorian racing industry operates in order to ensure that the integrity of the industry is protected and preserved. The protection and preservation of the industry is a matter of some importance in considering the public interest in whether or not an exclusion order should be made.

Under the heading ‘Protected Information’, Deputy Commissioner Patton said:

I have also considered other relevant, credible and significant information concerning you, that falls within the definition of ‘protected information’ in section 35E of the Racing Act. Having decided that there is a public interest in protecting this information, I have a duty not to disclose it. In considering this protected information I also placed significant weight on it forming my view to exclude you and that it was necessary to do so due to the risk you pose to the integrity of the Victorian racing industry and safety of racing industry participants and the general public who attend Victorian race meetings.

Deputy Commissioner Patton stated his conclusion as follows:

In my opinion, your conduct demonstrates a propensity by you for engaging in acts of physical violence, verbal threats and intimidation. In forming this view, I have considered not just the circumstances of any one instance, but the cumulative nature of the various instances of aggressive conduct by you towards others including in the course of your racing industry and personal interactions.
The protected information that I considered also demonstrated matters relevant to your lack of integrity, criminal associations and poor character. All of which when considered cumulatively caused me to form views in respect of the risk posed by you.
I consider that your conduct, combined with the issues identified from the protected information, means that allowing you to attend race-meetings at Victorian licensed racecourses poses a risk to the integrity of the Victorian racing industry and the safety and wellbeing of racing industry officials and participants and the general public, who attend race-meetings. Accordingly, I have concluded that it was necessary in all of the circumstances to make the Exclusion Order in the public interest.

Mr Nikolic’s response to the reasons

In his affidavit made in the proceeding before Ginnane J, Mr Nikolic stated that, until 1 September 2015, he was not aware of any intention of the Chief Commissioner of Police, or his delegates, to exclude him from race-courses in Victoria. He also stated that, until he received Mr Patton’s statement of reasons, he did not know:

that [Mr Patton] might issue a racing exclusion order on the basis that in his view, I have a lack of appreciation of, or ability to control, my behaviour towards others, including racing officials. Had I been aware of this, I would have been provided the opportunity to make submissions addressing this concern.

He referred to Deputy Commissioner Patton’s statement that:

The protected information that I considered also demonstrated matters relevant to your lack of integrity, criminal associations and poor character. All of which when considered cumulatively caused me to form views in respect of the risk posed by you.

And responded that:

Until I read the Statement of Reasons, I was never even made aware of the notion that the protected information goes towards proving my lack of integrity, criminal associations and poor character. I have not had the opportunity to respond to any such allegations.

Mr Nikolic stated that the making of the exclusion order greatly affected his capacity to derive a livelihood.

The conduct of the judicial review proceeding

After Mr Nikolic commenced proceedings for review of the decision under the Administrative Law Act 1978, the Chief Commissioner applied to have the review heard and determined under the procedure contained in s 35E(2)(a). That is, the Commissioner wished to rely on confidential affidavits which would not be disclosed to Mr Nikolic or his representatives.

After hearing submissions in open court, the judge decided that it was not in the public interest to hear and determine the application for review by the method proposed by the Chief Commissioner. His Honour decided instead that it would be appropriate to hold a hearing in closed court, in which the Chief Commissioner and each party to the proceeding would have the right to make submissions. This hearing method was authorised by s 35E(2)(b). In his Honour’s view, adopting this course would ensure ‘a high degree of protection’ of the confidential documents relevant to the case.[8]
[8]Nikolic v Chief Commissioner of Police [2016] VSC 143 [83].

His Honour ordered that Mr Nikolic should have the right to make submissions about the confidential evidence, by it being provided to his senior counsel, upon senior counsel giving to the Court non-disclosure undertakings, including undertakings not to seek instructions about the information and not to disclose what occurred during the closed court hearing. Limitations were also placed on where senior counsel could read the documents, and on the use that might be made of notes made by senior counsel concerning the documents.

Senior counsel also undertook not to represent Mr Nikolic in any other proceeding, save in any appeal arising from the judicial review proceeding. Before the Chief Commissioner made the confidential documents available to senior counsel to read, he was authorised to redact them to remove words that identified any person who met a description contained in ss 35E(4)(b)(i), (ii), (iii) or (iv) of the Racing Act. Mr Nikolic was not permitted to be present during the hearing of the review, but was represented by senior counsel. No other representative of Mr Nikolic was permitted to attend the hearing.

We should record that, by consent, the same arrangements were adopted when it became necessary for this Court to proceed in closed hearing to consider the content of the disputed information. On this occasion, Mr Nikolic was represented by senior and junior counsel.

The requirements of procedural fairness

The trial judge reviewed the relevant authorities, and identified the applicable principles, in terms which have not been challenged on this application. We respectfully adopt his Honour’s analysis, which we set out below (including the references to authority):[9]
[9]Reasons [107]–[114] (citations in original).

Under one of the obligations of the hearing rule, a decision-maker must inform a person affected by the decision or disclose to them adverse information that, as Brennan J described it, is ‘credible, relevant and significant’.[10] The High Court has explained that:
[10]Kioa (1985) 159 CLR 550, 629.
credible, relevant and significant’ must therefore be understood as referring to information that cannot be dismissed from further consideration by the decision-maker before making the decision. And the decision-maker cannot dismiss information from further consideration unless the information is evidently not credible, not relevant, or of little or no significance to the decision that is to be made. References to information that is ‘credible, relevant and significant’ are not to be understood as depending upon whatever characterisation of the information the decision-maker may later have chosen to apply to the information when expressing reasons for the decision that has been reached.[11]
[11]Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88, 96 [17] (‘VEAL’).

Where information that is already known to a person affected by the decision takes on a new significance at some stage of the decision-making process, the decision-maker may be required to disclose that significance.[12]
[12]See Gubbins v Wyndham City Council (2004) 9 VR 620, 639; Queensland Conservation Council Inc v Xstrata Coal Queensland Pty Ltd (2007) LGERA 322, 338 [47].
The duty of disclosure may go beyond the notification of adverse information in certain circumstances. As Kyrou J said in Shields v Overland:
in appropriate cases, and especially where the decision-maker has exclusive knowledge of specific information, the hearing rule requires the decision-maker to provide to a person affected not only material that is adverse to that person, but all material that has substantive relevance to the matter in issue — including, in particular, any exculpatory material — whether or not the decision-maker proposes to rely upon it. [13]
[13](2009) 26 VR 303, 332 citing R v Wise (2000) 2 VR 287, 294 [20]; R v Ulla (2004) 148 A Crim R 356, 362–3 [20]–[22]; see also Coutts v Close [2014] FCA 19 [116].

The duty of informing a person of adverse information may be limited by the ‘interests of others’, including obligations of confidentiality,[14] the requirements of national security,[15] or broader concepts of ‘public interest’.[16] In those cases, a balancing exercise of the interests of the individual and the interests of others must be undertaken in order to determine the requirements of procedural fairness in the particular case. As Kitto J said:
[14]See, eg, Hamblin v Duffy (No 2) (1981) 37 ALR 297; VEAL (2005) 225 CLR 88.
[15]See, eg, Leghaei v Director-General of Security (2007) 241 ALR 141, 146.
[16]See, eg, R v Gaming Board for Great Britain; Ex parte Benaim [1970] 2 QB 417.
this is particularly true where, as here, the statute giving rise to the duty of decision expressly recognizes and aims to protect the interests of others which may come into competition with those of the [person affected by the decision].[17]

The application of principles of procedural fairness may be moulded to the particular circumstances of each case.[18] The ‘moulding’ of the principles of procedural fairness may require a decision-maker to inform the person affected by the decision of the substance or gist of the information, while otherwise preserving important aspects of confidentiality.[19]
While each case will depend on the nature of the information in issue, it is useful to consider one example where the gist or substance of confidential information was provided. In Chu v Minister for Immigration and Ethnic Affairs,[20] the Full Federal Court considered that procedural fairness had been provided by giving the gist of allegations against an applicant for a permanent visa. The gist provided included confidential information from confidential sources on the basis of intelligence indicating that he was an associate of known criminals, that he was strongly implicated as being indirectly involved in criminal activity and that, on the balance of probabilities, he was involved in organised criminal activity, including through a business that he part owned.
Procedural fairness in cases concerning confidential information may require that the nature of the allegations be disclosed to the person affected by the decision or his legal representatives, so that advice may be given to him or her about whether to accept the decision-maker’s invitation to make written submissions, and if so, how those submissions should be framed. Again, the identity of the informant need not be disclosed if the decision-maker believes such disclosure might put the informant in peril.[21]
The application of the principles that I have discussed were described by Lord Denning MR in R v Gaming Board for Great Britain; Ex parte Benaim in the following manner:
Seeing the evils that have led to this legislation, the board can and should investigate the credentials of those who make application to them. They can and should receive information from the police in this country or abroad who know something of them. They can, and should, receive information from any other reliable source. Much of it will be confidential. But that does not mean that the applicants are not to be given a chance of answering it. They must be given the chance, subject to this qualification: I do not think they need tell the applicant the source of their information, if that would put their informant in peril or otherwise be contrary to the public interest.[22]

[17]Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475, 504.

[18]VEAL (2005) 225 CLR 88, 98–99.

[19]Ibid 99–100.

[20](1997) 78 FCR 314, 321 (Carr and Sundberg JJ).

[21]Minister for Immigration, Local Government and Ethnic Affairsv Kurtovic (1990) 21 FCR 193, 223 (Gummow J) (‘Kurtovic’).

[22][1970] 2 QB 417, 431.

As his Honour noted, it was common ground before him, as it was before us, that the Chief Commissioner was obliged to afford Mr Nikolic procedural fairness in deciding whether to make an order under s 33. The dispute concerned what content should be given to those requirements in the circumstances of the case.[23]
[23]Reasons [119].

As we have said, the key issue was the confidentiality of the material on which the decision-maker relied. His Honour said:

The principles which I have previously discussed, required the Deputy Commissioner before making the Exclusion Order to consider disclosing to, or informing, Mr Nikolic of adverse material that was credible, relevant or significant or exculpatory material unknown to him. If the information was confidential, the Deputy Commissioner was required to consider moulding the means of disclosure to meet that circumstance.[24]

[24]Reasons [125].

His Honour said that he had taken into account the evidence before him, including from the decision-maker, about the confidentiality of the material. In his Honour’s view:

the Deputy Commissioner … was right to conclude that much of the information was confidential information. The obligations imposed by procedural fairness will reflect the confidentiality of information.[25]

[25]Reasons [128].

His Honour’s conclusion was as follows:

Turning to the specific issues in this case, I do consider that the Deputy Commissioner breached the requirements of procedural fairness or natural justice by not providing Mr Nikolic with details of adverse information that was credible, relevant and significant. This obligation included providing documents that contained such information or the gist or substance of such documents. In one instance, there was a breach of procedural fairness by failing to provide Mr Nikolic with information that was exculpatory.

Before addressing this conclusion, it is necessary to deal with the question of construction raised by ground 1.

The construction issue

The Chief Commissioner, who was represented on this application by the Solicitor-General, contended that the judge had misconstrued s 33. In particular, it was said, his Honour was bound

to construe the content of the procedural fairness obligation attaching to the exercise of power in s 33 of the Act consistently with the context in which s 33 appears or the nature of the power.

The Commissioner’s particular argument based on context was that the definition of ‘protected information’ in s 35E(6) applied — as a matter of necessary implication — to a decision made under s 33. The implication was said to be that information which fell within that definition was not required to be disclosed in the course of the making of a decision under s 33. Put another way, the effect of s 35E was to create a class (or a series of categories) of information which automatically fell outside the scope of the Commissioner’s obligation to accord procedural fairness in connection with a decision under s 33.

The judge rejected this argument, saying:

The scheme established by s 35E of the Racing Act for the hearing of reviews of Exclusion Orders does not govern the procedural fairness obligations of a decision-maker when deciding whether to make an Exclusion Order under s 33. Rather, s 35E deals with the separate matter of empowering the Court to adopt a method of hearing the review other than in an open court. Section 35E was enacted by different legislation and at a different time to s 33.[26]
Section 35E is designed to safeguard ‘protected information’ as that term is defined in s 35E(6) during the conduct of reviews of Exclusion Orders. The Deputy Commissioner’s conclusion that certain material was ‘protected information’, which he was not permitted by law to disclose to Mr Nikolic, applied a criteria that was not determinative of the exercise of the power conferred by s 33 consistently with the requirements of procedural fairness. The defendant submitted that unless s 33 prevented disclosure of protected information at the point that the making of an Exclusion Order is being considered, there would be no point in protecting that information during any review of the making of that order under s 35E. But there is nothing in the text of s 33 to support such a reading. Rather, the power contained in s 33 must be exercised consistently with the principles of procedural fairness and, where confidential information is involved, by moulding those requirements as is appropriate.[27]

[26]Section 33 was enacted by the Racing and Gaming Acts (Police Powers) Act 2005; s 35E was enacted by the Major Crime Legislation Amendment Act 2009; see Nikolic v Chief Commissioner of Police [2016] VSC 143 [17]–[26].

[27]Reasons [126]–[127] (citations in original).

On the appeal, the Commissioner renewed the argument, in these terms:

Section 35E addresses the public interest in a person being able to challenge an exclusion order, the public interest in open justice and the public interest in maintaining the confidentiality of protected information. Critically, it is a necessary premise on which s 35E operates that, at least to that point, the protected information will be confidential and will not have been provided to [Mr Nikolic], to the extent that provision of that information to [Mr Nikolic] would undermine its status as protected information.
…
With respect to his Honour, the regime in s 35E of the Act is only engaged if the protected information was relevant to the review. To put it another way, there is no information for the regime in s 35E to protect on review unless ‘protected information’ formed part of the basis for making the decision under s 33.
…
The primary difficulty with his Honour’s quarantining of ‘protected information’ to the later stage of the review hearing is that by the review hearing the very information sought to be protected would already be known by [Mr Nikolic]. The premise on which s 35E is erected would be negated by the earlier provision under s 33 of protected information to the person affected. That approach was in error.

In our view, this submission must be rejected. As his Honour correctly stated, ss 33 and 35E are concerned with quite distinct subject-matters. Section 33 confers on the Chief Commissioner the power to make an exclusion order. It is that power which, if exercised, will affect adversely the interests of the person the subject of the order and that is, of course, the basis on which the obligation to accord procedural fairness is attracted.

Section 35E has no application to the making of a decision under s 33. It is concerned with — and only with — the hearing by a court of an application for review of a decision made under s 33. Self-evidently, the two decision-making processes are quite separate — temporally, functionally and jurisdictionally. The process of decision-making under s 33 is an exercise of executive power. The determination of an application for judicial review is an exercise of judicial power by the Supreme Court in its supervisory jurisdiction.

As the Solicitor-General properly conceded, if the legislature had wished to regulate the decision-making process under s 33, provisions could readily have been enacted which limited (or prohibited) the disclosure of specified categories of information to a person affected. It is clear, in our view, that if the legislature had intended to authorise the Commissioner to withhold all ‘protected information’ from disclosure in that decision-making process, express provision to that effect would have been necessary.[28] None of the conditions exist which would entitle the Court to ‘read in’ words to the same effect.[29]
[28]See, eg, Migration Act 1958 (Cth) s 503A, as considered by the Full Federal Court in Vella v Minister for Immigration and Border Protection (2015) 230 FCR 61.
[29]See DPP v Leys (2012) 44 VR 1; see also Taylor v Owners – Strata Plan No 11564 (2014) 253 CLR 531, 548–549 [38]–[40].

Nor is it correct to assert — as the Chief Commissioner did — that the ‘premise’ on which s 35E operates is that ‘at least to that point [ie, the hearing of the review application], the protected information will be confidential and will not have been provided to the person the subject of the exclusion order’. As we have already pointed out, s 35E is concerned only with the conduct of the judicial review proceeding. It is not ‘premised’ on any assumption about what will have occurred in the earlier process of making the administrative decision.

Even if — contrary to our view — s 35E were thought to rest on an implied assumption about the conduct of the decision-making process, it is not an assumption that the person affected will not have seen the information. While it is true that the procedure contemplated under s 35E(6)(a) may involve the person affected not being present for the hearing (and presumably not being informed of the information), the procedure under paragraph (b) simply contemplates the hearing being held in closed court. There is no suggestion that, under that procedure, the person affected would be denied access to the relevant information.

For these reasons, we reject the Commissioner’s contention that the existence — and the content — of s 35E operate of themselves to relieve the Commissioner of any obligation to disclose ‘protected information’ to a person in respect of whom he/she is considering exercising the power under s 33. It does not follow, however, that s 35E is irrelevant to the question before the Court. On the contrary, s 35E is of real contextual significance, but for reasons quite different from those advanced by the Chief Commissioner. We return to these considerations below.[30]
[30]See [79]–[94] below.

Constructive failure to exercise jurisdiction

It is convenient at this point to consider the Notice of Contention which Mr Nikolic filed following the appeal hearing. It concerns the following passages in the Deputy Commissioner’s Statement of Reasons:

In making the Exclusion Order, I have had regard to the statutory framework, your submissions made on 4 and 9 November 2015, evidence before me relating to your criminal history, your disciplinary history when a licensed jockey, the issuing of a Casino Exclusion Order to you by the CCP (as summarised in the letter to you dated 30 October 2015), and ‘protected information’, which I am not permitted to disclose to you for public interest reasons.
…
I have also considered other relevant, credible and significant information concerning you, that falls within the definition of ‘protected information’ in s 35E of the Racing Act. Having decided that there is a public interest in protecting this information, I have a duty not to disclose it.[31]

[31]See [20] above (emphasis added).

According to the Notice of Contention, the judge’s order quashing the exclusion order can be supported on a different ground, namely, that:

the Deputy Commissioner misunderstood the nature of the jurisdiction and the power he was exercising and in consequence applied a wrong test and misconceived his duty in relation to the extent to which he could reveal to [Mr Nikolic] or to his legal representatives the documents and information he claimed to be ‘protected information’, in that:
(a)he said in his reasons that he was ‘not permitted to’, and had a ‘duty to not’, disclose the protected information … ; and
(b)he applied a wrong test in relation to the Allegations Table and to certain transcript before the Stewards which the learned trial Judge found not to be ‘protected information’ and therefore information that ought to have been revealed to the Respondent or his legal advisers,

and by reason of the above the Deputy Commissioner constructively failed to exercise his power under s 33, which matter was raised by Ground (b)(ii) before the learned trial Judge but not determined by his Honour save for relevant findings made at paragraph [129].

The relevant ground in the application for judicial review contended that the Commissioner had failed to observe the rules of procedural fairness in making the decision, in that:

(2)he did not consider, alternatively did not exercise his discretion to consider, whether he could disclose the protected information or the gist of that information to the Plaintiff, subject to such conditions (if any) that may be appropriate.[32]

His Honour did not address this ground expressly but said:
Deputy Commissioner Patton considered that no further information could be provided to Mr Nikolic, although as stated he did so on the assumption that the remainder of the information was protected information and that he was obliged by law not to disclose it.[33]

[32]Reasons [4].

[33]Reasons [129].

On the appeal, Mr Nikolic submitted that the decision-maker had erroneously treated the question of disclosure of information as foreclosed once it was determined that the information was ‘protected information’ within the scope of s 35E(6). This was said to constitute a constructive failure to exercise jurisdiction under s 33.[34] According to the submission, the decision-maker had failed to recognise that, even when particular information fell within that definition, he still had to decide:

(a) whether that information could be disclosed and, if so, in what form; and

(b) to the extent that information could not be disclosed, whether he would rely on it in making a decision under s 33.

[34]See Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, 339 [41].

In our view, this argument proceeds from a false premise. It is simply not correct to attribute to the decision-maker the view that, once information fell within the definition of ‘protected information’, its disclosure was necessarily precluded. On the contrary, as the Solicitor-General pointed out, the relevant part of the decision-maker’s reasons contained two quite distinct statements.

The first statement was to the effect that he had considered information which fell within that definition. The second statement was as follows:

Having decided that there is a public interest in protecting this information, I have a duty not to disclose it.

So, far from indicating that the decision-maker regarded the applicability of the statutory definition as automatically preventing disclosure, this statement makes clear that he had independently considered the consequences of disclosure, and had decided that there was a public interest in non-disclosure. (There was no challenge to this statement when Deputy Commissioner Patton was cross-examined by counsel for Mr Nikolic.) Having reached that decision, it followed logically that he regarded himself as bound not to disclose it. The other passage relied on should be understood as saying the same thing.

In view of that conclusion it is unnecessary to consider whether, if the decision-maker had taken the erroneous view ascribed to him regarding disclosure, that would have constituted a constructive failure to exercise the jurisdiction under s 33. As the Notice of Contention was filed after the hearing, we had only the briefest of oral submissions from either side on that question.

The second part of the Notice concerns the so-called ‘allegations table’, non-disclosure of which was said to constitute a breach of procedural fairness. We deal with that document in that context, in the restricted section of our reasons. No question of constructive failure arises.

The Notice of Contention must be dismissed.

Disclosing the ‘gist’ or ‘substance’

As noted earlier, the judge’s conclusion was that, in the circumstances of the present case, the obligation to accord Mr Nikolic procedural fairness included ‘providing documents that contained [the relevant adverse] information or the gist or substance of such documents’.[35] With great respect, we have concluded that this was not a case where it was possible for the ‘gist’ or ‘substance’ of the relevant information to be provided without jeopardising the public interest which — as his Honour accepted — prevented disclosure of the detailed information itself.
[35]Reasons [131].

Our reasons for this conclusion fall into three parts. The first involves examining those cases in which disclosure of the ‘gist’ has been considered as a possible means of resolving the tension between procedural fairness and confidentiality. The second part considers the particular statutory context in which the power to make exclusion orders is conferred. The provisions of s 35E are of particular importance in this regard. The final section of these reasons — which must of necessity remain restricted — explains why, in the present circumstances, disclosure of the ‘gist’ of the adverse information was not an available solution.

We begin with the judgment of Brennan J in Kioa.[36] Two passages are of particular importance. The first, on which counsel for Mr Nikolic relied, was in these terms:

It must therefore be accepted, as one commentator points out (G Johnson ‘Natural Justice and Legitimate Expectation in Australia’, Federal Law Review, vol 5 (1985) 39, at p 71), that ‘the contents of natural justice range from a full-blown trial into nothingness’. Yet Tucker LJ said in Russell v Duke of Norfolk (80), that there is an irreducible minimum required by the principles of natural justice, namely, that ‘the person concerned should have a reasonable opportunity of presenting his case’. If his Lordship’s view be right, it would be necessary to hold that if, in some circumstances, perhaps unusual circumstances, a power may need to be exercised peremptorily, no exercise of that power is conditioned on observance of the principles of natural justice. But it would be wrong to attribute to a legislature such an intention. Rather, the intention to be implied when the statute is silent is that observance of the principles of natural justice conditions the exercise of the power although in some circumstances the content of those principles may be diminished (even to nothingness) to avoid frustrating the purpose for which the power was conferred. Accepting that the content of the principles of natural justice can be reduced to nothingness by the circumstances in which a power is exercised, a presumption that observance of those principles conditions the exercise of the power is not necessarily excluded at least where, in the generality of cases in which the power is to be exercised, those principles would have a substantial content.[37]

[36](1985) 159 CLR 550.

[37]Ibid 615–6 (emphasis added) (citations omitted).

The second passage is as follows:

Administrative decisions are not necessarily to be held invalid because the procedures of adversary litigation are not fully observed. … Nevertheless in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made.[38]

This passage was quoted by the members of the High Court in their joint judgment in VEAL,[39] on which counsel for Mr Nikolic also relied. In VEAL, the issue was whether the decision-maker, in refusing an application for a protection visa, had denied the applicant procedural fairness by failing to disclose to him a letter which made allegations about his activities, and political affiliations, in his country of origin. The letter had been sent to the Department of Immigration with a request that it be kept secret.[40]

[38]Ibid 628–9 (emphasis added).

[39](2005) 225 CLR 88, 95 [15].

[40]Ibid 88 [2].

The High Court decided that the decision-maker (the Refugee Review Tribunal) had been right to decline:

(c) to provide a copy of the letter to the applicant; and

(d) to disclose to him any information that might have revealed the identity of the author of the letter.

But the Court held that the Tribunal should have told the applicant ‘the substance of the allegations made in the letter’.

The relevant part of the High Court’s reasoning is as follows:

In this case, the particular content of the obligation to accord procedural fairness was to be identified having regard not only to the particular provisions of the Act that regulated the Tribunal’s work but also to the scope and objects of the Act as a whole. In that latter regard, it is necessary to keep two propositions at the forefront of consideration. First, the Act required that those entitled to a particular visa be granted the visa they sought, and that those not entitled be refused. Secondly, the Act committed the decision to grant or refuse a visa to the Executive government and the Tribunal was likewise exercising executive power, not judicial power.
It follows from this second proposition that the steps the Tribunal was bound to take in order to afford procedural fairness are not necessarily to be identified with the steps that should be taken by a court deciding a matter by adversarial procedures. Nonetheless, it must be recognised that just as courts mould their procedures to accommodate what has become known as public interest immunity, so too the content of the Tribunal’s obligation to accord the appellant procedural fairness may be informed by those same considerations. No doubt care must be exercised in transposing what is said in the context of adversarial litigation about public interest immunity and its application to those who inform police about criminal activity to the wholly different context of inquisitorial decision-making by the Executive where the subject matter of the information imparted was not that someone had committed a crime in Australia. Nonetheless, in identifying what the Tribunal had to do in order to give the appellant procedural fairness, it is necessary to recognise that there is a public interest in ensuring that information that has been or may later be supplied by an informer is not denied to the Executive government when making its decisions.
The existence of that public interest is not to be understood as requiring the conclusion that there is an absolute rule against an administrative decision-maker disclosing to a person, whose interests may be affected by the decision that is to be made, information that has been supplied by an informer. Nor does it necessarily mean that there is an absolute rule against disclosing the identity of an informer to such a person. It is neither necessary nor appropriate to attempt to state some all-encompassing rules about how administrative decision-makers should deal with information supplied in this way. Not least is that because use of the expression ‘informer’ in the context of administrative decision-making not only does not reveal what kind of information is conveyed by the informant, but also does not reveal what relevance the information may have to the decision that is to be made. The application of principles of procedural fairness in a particular case must always be moulded to the particular circumstances of that case.
…

The appellant submitted that procedural fairness further required that he be given the letter because, if he did not know who had written the letter, one obvious form of answer to the allegations made in it would be denied to him. He could not say that the author of the letter was not to be believed. That is, he could not attack the credibility of the informer unless he knew who the informer was.
So much may readily be accepted. But it by no means follows that the Tribunal was bound to give the appellant a copy of the letter, or tell him who had sent it, or even tell him that the information had been sent in written form. To give the appellant a copy of the letter or tell him who wrote it would give no significance to the public interest in the proper administration of the Act which, as pointed out earlier, required that those entitled to a visa be granted one and those not entitled be refused. It is in aid of that important public interest that, so far as possible, there should be no impediment to the giving of information to authorities about claims that are made for visas. That public interest, and the need to accord procedural fairness to the appellant, could be accommodated. They were to be accommodated, in this case, by the Tribunal telling the appellant what was the substance of the allegations made in the letter and asking him to respond to those allegations. How the allegations had been given to the Tribunal was not important. No doubt the appellant’s response to the allegations would then have had to be considered by the Tribunal in light of the fact that the credibility of the person who made the allegations could not be tested. And that may well leave the Tribunal in a position where it could not decide whether the allegations made had substance. But the procedure outlined would be fair to the appellant and it would be a procedure which accommodated what Brennan J described in Kioa as the ‘problem of confidentiality’. Although it may be accepted that the Tribunal sought to act fairly, the procedure it in fact adopted was not fair.[41]

[41]Ibid 98–100 [23]–[25], [28]–[29] (emphasis added) (citations omitted).

Two points may be noted. First, the particular dimension of the public interest which underpinned the need for confidentiality in that case was that:

so far as possible, there should be no impediment to the giving of information to authorities about claims that are made for visas.[42]

Secondly, the Court considered that there was a practical means of reaching an ‘accommodation’ between that public interest and the need to accord procedural fairness to the visa applicant. The substance of the allegations could be disclosed, the Court held, without identifying the source of the allegations.

[42]Ibid 100 [29].

The same problem arose — and a similar accommodation was found — in Chu v Minister for Immigration and Ethnic Affairs,[43] on which counsel for Mr Nikolic also relied. There, a decision to refuse a visa had been made in reliance on confidential information which had not been disclosed to the visa applicant. He had, however, been provided with a summary of the information. The question raised before the Full Federal Court was whether the decision-maker had

fairly disclosed to [the applicant] all that could properly be disclosed of the material which is both personal and adverse to him, consistent with the protection of the public interest in maintaining confidentiality about the source of the information.[44]

Having reviewed the confidential information for themselves, the majority (Carr and Sundberg JJ) were
satisfied that the summary … amounted to adequate disclosure of the confidential information. It was as accurate a summary of that material as could possibly be disclosed without prejudicing the interests which are protected by public interest immunity.[45]

[43](1997) 78 FCR 314 (‘Chu’).

[44]Ibid 328.

[45]Ibid 329.

Importantly for present purposes, neither of these decisions can be said to have established any general proposition about how the conflicting requirements of confidentiality and procedural fairness are to be accommodated in a given case. Nor, as Maxwell P pointed out in the course of argument, did they even establish a general proposition about how to accommodate the need to protect sources of information. Cases can readily be imagined where, because of the nature of the information provided by the source and/or the circumstances in which the source obtained the information, provision to the person affected of the substance or ‘gist’ of the information would inevitably identify the source. In those circumstances, the need to protect the source would very likely prevent the provision of any information at all on that subject.

The submission for Mr Nikolic was that, when a decision-maker is under an obligation to accord procedural fairness, the law does not permit the content of (relevant) disclosure ‘to be reduce[d] to nil’. The only circumstance in which ‘procedural fairness may give way to non-disclosure’, counsel submitted, was where disclosure would defeat the purpose for which the relevant power was conferred. Counsel referred to the passage from the judgment of Brennan J in Kioa set out at paragraph 57 above.[46]
[46]See also Johns v Australian Securities Commission (1993) 178 CLR 408, 472.

It should be pointed out immediately that the present is not a case of ‘nil disclosure’. On the contrary, as noted earlier, Mr Nikolic was provided with a substantial body of documents containing information on which the decision-maker proposed to rely. The fact that Mr Nikolic was already aware of most of the information does not affect the proposition that its disclosure discharged (pro tanto) the obligation to accord procedural fairness.

A more accurate characterisation of the issue which arises here is whether, when particular pieces of information or particular documents are said to be confidential, it is consistent with procedural fairness for such items to be withheld in their entirety or whether some minimum disclosure — of ‘gist or substance’ — is required.

On the appeal, as at first instance, counsel for Mr Nikolic relied on a decision of Lehane J in Gilson v Minister for Immigration and Multicultural Affairs.[47] That case concerned the refusal of an application for an entry permit. The decision-maker had relied on information contained in documents which the Minister declined to produce on the ground of public interest immunity. (Although it was ultimately not necessary for the judge to rule on the question, he stated his conclusion that the claim of public interest immunity was made out.)
[47][1997] FCA 642 (‘Gilson’).

As his Honour’s reasons record, Lehane J accepted that the release of the documents ‘would be likely to reveal the identity of an informant or informants’. Crucially, however, he concluded that since the information could not be made available to the applicant, it should not have been before the decision-maker at all. His Honour said:

I do not think Kioa, Kurtovic or Chu offers any encouragement to a proposition that if, in circumstances such as the present, information is available which is adverse to an applicant on a crucial issue, but both the documents containing the information and its substance are protected entirely from disclosure by public interest immunity, the information may nevertheless be made available to the decision-maker and taken into account against the interests of the applicant. In my view all three decisions are authority strongly to the contrary of such a proposition. If the material was to be before the tribunal — that is, if the Tribunal was to be made aware of its content — then the Kioa principle required that it be put to [the applicant]. If in such circumstances information is of so sensitive a kind that it, or its substance, cannot by any means be put to an applicant, then it should not be before the Tribunal at all.[48]

[48]Ibid.

Counsel for Mr Nikolic did not identify — nor have we been able to find — any decision in which the view expressed in Gilson was subsequently approved or applied.[49] In any case, the decision must be viewed as having been overtaken by the decision of the Full Court of the Federal Court in Leghaei v Director-General of Security.[50]
[49]For cases that have considered Gilson, see Akpata v Minister for Immigration and Multicultural Affairs [1998] FCA 1473; Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 197 ALR 741; Fernando v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 975.
[50](2007) 241 ALR 141 (‘Leghaei’).

In that case, the appellant was notified that the Minister for Immigration proposed to cancel his residency visa on the ground that the authorities had assessed him to be a direct risk to Australia’s national security. He brought a judicial review proceeding to quash the security assessment, relevantly on the ground that he had been denied procedural fairness. Evidence was given by the Director-General of Security, in two confidential affidavits, that it was not possible to give the appellant even a summary of the case against him without compromising the interests of national security.

The judicial review application was dismissed. The trial judge concluded that national security considerations reduced to ‘nothingness’ the content of the obligation to afford procedural fairness.[51] As the Full Court noted, this expression was presumably drawn from the judgment of Brennan J in Kioa (set out above).[52]
[51]Leghaei v Director-General of Security [2005] FCA 1576 [88].
[52]Leghaei (2007) 241 ALR 141, 146 [45]; see [57] above.

Dismissing the appeal, the Full Court noted that the obligation to accord procedural fairness would ordinarily require the decision-maker to put to the person affected ‘the specific grounds on which the decision is likely to turn … so that he or she may direct submissions to the critical issue or issues.’[53] Their Honours continued:
[53]Leghaei (2007) 241 ALR 141, 146 [47].

However, it is well recognised that reasons of national security may make it impossible to disclose the grounds on which the executive propose to act: Salemi v MacKellar [No 2]. Thus, as Lockhart J said in Amer v Minister for Immigration, Local Government and Ethnic Affairs:
The case raises the old but important question for the courts of balancing two aspects of the public interest which have a potential for conflict, namely, that a party is entitled to know the case he has to meet yet the furtherance of the national interest may require that certain elements in the case should be withheld from him.

…
In Amer [No 2] (at 9–10), Lockhart J recognised that in some cases the balancing of the conflicting principles produces the ‘unsatisfactory’ feature that the content of a security assessment is withheld from the person affected. However, his Honour remarked that this is an inevitable result if the balance is determined in favour of the public interest in national security.
If that is where the balance is found to lie, then it may well be correct, as the primary judge appears to have concluded in the present case, that the content of the procedural fairness obligation is reduced in particular terms to ‘nothingness’.
Such a result would be consistent with the observations of Brennan J in Church of Scientology v Woodward. His Honour there observed that the secrecy of the work of an intelligence organisation which is to counter threats of espionage and sabotage is essential to national security, and it will be a rare case where the public interest in national security will yield to the public interest in the administration of justice.
In the present case, the primary judge was plainly right to strike the balance in favour of the protection of the public interest in national security. This is because of the weight his Honour gave to the unchallenged evidence of the Director-General.
Whether this reduced the obligation to mere ‘nothingness’ and afforded such a degree of procedural fairness as was consistent with the protection of national security involves little more than a semantic argument.[54]

[54]Ibid 146–7 [48], [50]–[54] (emphasis added) (citations omitted).

That decision was followed by Tracey J in Sagar v O’Sullivan.[55] That case, too, concerned adverse security assessments, on the basis of which the Minister for Immigration decided not to grant protection visas. Applying Leghaei, his Honour upheld the contention of the Director-General of Security that

in some rare cases, such as the present, no jurisdictional error is made if sensitive security information is withheld from an applicant and the applicant is not, as a result, alerted to prejudicial material on which the decision has been based.[56]

[55](2011) 193 FCR 311.

[56]Ibid 325 [73].

The foregoing discussion of the authorities demonstrates that, in certain contexts, the importance of protecting highly sensitive information may have the consequence that the principles of procedural fairness do not require the disclosure of even the substance or gist of that information to the person who is the subject of the decision in question. In such a case, the dictates of procedural fairness are qualified in order to accommodate the overriding public interest which requires protection of the sensitive information.

The statutory context

The other pertinent aspect of the joint judgment in VEAL concerned the relevance of statutory context to the determination of what procedural fairness requires in a particular case. With slight modification, what the Court said there applies with equal force to the present case. That is:

the particular content of the obligation to accord procedural fairness was to be identified having regard not only to the particular provisions of the Act that regulated the [Commissioner’s] work but also to the scope and objects of the Act as a whole.[57]

[57]See VEAL (2005) 225 CLR 88, 98 [23].

Reference should also be made to the following passage from the unanimous judgment of the High Court in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs,[58] on which the Commissioner relied:

It has long been established that the statutory framework within which a decision-maker exercises statutory power is of critical importance when considering what procedural fairness requires. It is also clear that the particular content to be given to the requirement to accord procedural fairness will depend upon the facts and circumstances of the particular case. As Kitto J said in Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation:
the books are full of cases which illustrate both the impossibility of laying down a universally valid test by which to ascertain what may constitute such an opportunity [‘to correct or contradict any relevant statement prejudicial to their view’ - FTN.11] in the infinite variety of circumstances that may exist, and the necessity of allowing full effect in every case to the particular statutory framework within which the proceeding takes place.[59]

[58](2006) 228 CLR 152, 160–1 (‘SZBEL’).

[59]Ibid 160-1 [26] (emphasis in original) (citations omitted).

It is not in dispute that the principal object of pt I of the Racing Act is to ensure the integrity of horse racing in Victoria.[60] Section 33 authorises the Chief Commissioner to make an exclusion order ‘if he or she considers it necessary in the public interest’. The provision itself gives no indication of what the relevant public interest considerations might be but the parties accepted that guidance could properly be obtained from the second reading speech which accompanied the amending Bill which inserted s 33.[61]
[60]Cf Racing Victoria Ltd v Riley [2016] VSCA 230 [1].
[61]Racing and Gaming Acts (Police Powers) Bill 2005.

In that speech, the Minister pointed out that the Commissioner already had power under the Casino Control Act 1991 to issue an exclusion order preventing a person from entering, or remaining in, the gaming area of a casino.[62] There was, however, no equivalent power to exclude persons from race-courses. The Minister said:

Currently, alleged crime figures, excluded from the casino by an order of the Chief Commissioner of Police, remain free to attend race meetings. This provides the opportunity for such persons to undermine the integrity of racing and engage in corrupt practices such as coercing individuals in the industry or potentially in money laundering.
The proposal to extend the power to issue exclusion orders to encompass race meetings protects against behaviours that may damage the integrity of the racing industry.[63]

The amendments were said to be
particularly important as they will assist Victoria Police to implement its organised crime strategy and serve to protect the Victorian racing industry.[64]

[62]The decision-maker in the present case noted that such an order was already in force in respect of Mr Nikolic: see [14] above.

[63]Victoria, Parliamentary Debates, Legislative Assembly, 19 May 2006, 1255 (John Pandazopolous, Minister for Racing).

[64]Ibid.

We referred earlier to the contextual significance of s 35E. The elaborate provisions of that section convey, very clearly, the legislature’s recognition of:

·the types of information which are likely to be taken into account in the making of a decision under s 33;
·the dimensions of the public interest which will weigh against disclosure of that information; and
·the measures which a court is authorised to take, where necessary, to protect those aspects of the public interest.

When s 35E was inserted into the Racing Act in 2008, the then Minister told the Parliament that the special court procedures were

designed to protect the highly sensitive intelligence upon which the chief commissioner bases his or her decision to make an exclusion order … While the bill does not preclude an excluded person from seeking judicial review of the chief commissioner’s decision, it does afford a suitable level of protection for the intelligence upon which the exclusion order was made …[65]

[65]Victoria, Parliamentary Debates, Legislative Assembly, 12 November 2008, 4568 (Rob Hulls, Minister for Racing).

We refer first to s 35E(4)(a), which requires the court (in deciding which hearing method to adopt) to take into account

the public interest in protecting the confidentiality of police investigative techniques and protected information in the possession of the police.[66]
[66]Racing Act s 35E(4)(a).

‘Protected information’ is defined, in turn, to mean ‘intelligence information’ the disclosure of which is likely:
·to reveal the identity of a police officer who provided information on the basis of which the exclusion order was made (or of a person who provided that information to a police officer);
·to reveal the identity of a person named in any evidence given, or information provided to a police officer relating to a police investigation;
·to reveal the identity of a person who is, or has been, the subject of a police investigation;
·to place at risk an ongoing police investigation; or
·to risk the disclosure of any investigative method used by police.[67]

[67]Ibid s 35E(6).

Of particular significance for present purposes are the various hearing methods which the Court is authorised to adopt if the Commissioner objects to the disclosure or production of protected information. There are three principal options. The Court may hear and determine the application:

(a)at a hearing at which evidence given by a police officer is given on the basis of a confidential affidavit that is not disclosed to one or more of the parties or any representative of those parties; or
(b)at a hearing held in closed court in which the Chief Commissioner and each party to the proceeding has a right to make submissions; or
(c)at a hearing held without notice to, and without the presence of, one or more of the parties or any representative of those parties.[68]

(The Court may also adopt a combination of these methods: s 35E(2)(d); and may appoint a ‘special counsel’ to represent the interests of a party: s 35F.)

[68]Ibid s 35E(2)(a)–(c).

Of these, the first and third represent very significant departures from established court procedures. As to the first, in addition to being able to decide the application on the basis of confidential evidence which is not disclosed to the applicant for review, the Court is expressly empowered by s 35E(5) to require the officer giving the confidential evidence to supply ‘any further confidential affidavits the [C]ourt requires to determine the application’. As to the third, it is indeed a remarkable notion that the Court might determine the application for judicial review at a hearing of which the applicant was not even given notice.

Plainly enough, these are quite extraordinary provisions. Put simply, they authorise the abrogation of fundamental principles of justice. As Lord Neuberger PSC said in Bank Mellat v Her Majesty’s Treasury [No 2]:[69]

The idea of a court hearing evidence or argument in private is contrary to the principle of open justice, which is fundamental to the dispensation of justice in a modern democratic society.
…
Even more fundamental to any justice system in a modern, democratic society is the principle of natural justice, whose most important aspect is that every party has a right to know the full case against him, and the right to test and challenge that case fully. A closed hearing is therefore even more offensive to fundamental principle than a private hearing. At least a private hearing cannot be said, of itself, to give rise to inequality or even unfairness as between the parties. But that cannot be said of an arrangement where the court can look at evidence or hear arguments on behalf of one party without the other party … knowing, or being able to test, the contents of that evidence and those arguments … , or even being able to see all the reasons why the court reached its conclusions.[70]

[69][2014] AC 700 (‘Bank Mellat’).

[70]Ibid 730 [2]–[3].

In Al Rawi v Security Service,[71] Lord Dyson JSC characterised these common law principles as ‘the open justice principle’ and ‘the principle of natural justice’ respectively. His Lordship said:

In recent years, both the courts and Parliament have been exercised by the problem of how to balance (i) the interest that we all have in maintaining a fair system of justice which, so far as possible, respects the essential elements of these principles and (ii) the interest that we also all have in the protection of national security, the international relations of the United Kingdom and the prevention, detection and prosecution of crime.[72]

[71][2012] 1 AC 531 (‘Al Rawi’).

[72]Ibid 573 [14] (emphasis added).

In both those cases, the UK Supreme Court was considering what has come to be known as a ‘closed material procedure’, which contravenes both the open justice principle and the natural justice principle. Such incursions into fundamental common law rights could only occur, the Court held, under express legislative authority.[73]
[73]See now Justice and Security Act 2013 (UK), discussed in Daniel Kelman, ‘Closed trials and secret allegations: an analysis of the “gisting” requirement’ (2016) 80(4) Journal of Criminal Law 264.

Related questions were addressed by the High Court in Assistant Commissioner Condon v Pompano Pty Ltd.[74] The Court was there concerned with statutory provisions which authorised the Supreme Court of Queensland to conduct proceedings in closed court, without notice to persons affected and/or without disclosure of information declared to be ‘criminal intelligence’.
[74](2013) 252 CLR 38 (‘Condon’).

French CJ said:

At the heart of the common law tradition is ‘a method of administering justice.’That method requires judges who are independent of government to preside over courts held in public in which each party has a full opportunity to present its own case and to meet the case against it. Antithetical to that tradition is the idea of a court, closed to the public, in which only one party, a government party, is present, and in which the judge is required by law to hear evidence and argument which neither the other party nor its legal representatives is allowed to hear.[75]

[75]Condon (2013) 252 CLR 38, 46 [1] (citations omitted); see also Re Nolan; Ex parte Young (1991) 172 CLR 460, 496.

His Honour went on to say:

Both the open court principle and the hearing rule may be qualified by public interest considerations such as the protection of sensitive information and the identities of vulnerable witnesses, including informants in criminal matters.
…
The ordinary rule of open justice in the court room may give way to the need for confidentiality in order to avoid prejudice to the administration of justice in cases in which publicity would destroy the subject matter of litigation.[76]

[76]Condon (2013) 252 CLR 38, 72–73 [68], [70] (citations omitted); see also Condon (2013) 252 CLR 38, 100 [157]: ‘[T]he general rule is not absolute. There are circumstances in which competing interests compel some qualification to its application.’

These authorities throw into sharp relief the importance which the legislature attaches to the public interest in the prevention, detection and investigation of criminal activity connected with the racing industry. Put shortly, the legislature has set such store by the need to protect that public interest that it has authorised the Court to depart from fundamental conceptions of justice where necessary to avoid disclosure of sensitive police intelligence information.[77]
[77]See now Open Courts Act 2013 s 8(1).

Two of the three hearing methods provided for in s 35E would, if implemented, reduce the content of procedural fairness to ‘nothingness’. In the first case, neither the person affected nor his/her legal representative would be aware of the confidential information on the basis of which the judicial review proceeding was to be determined. In the second, the person would not even be aware that a hearing of the application was taking place.

That the legislature could authorise such wholesale departures from the principles of justice necessarily informs the view which should be taken of what procedural fairness requires in the decision-making process. As noted earlier, the statutory context is ‘critically important’ in deciding that question.

We note that, in accordance with the requirements of the Charter of Human Rights and Responsibilities Act 2006 (the ‘Charter’), the Minister tabled a Statement of Compatibility in respect of the proposed s 35E. The Statement acknowledged that these provisions — when engaged — would limit the right of the person affected to a fair hearing under s 24 of the Charter, but maintained that the limitation was ‘directly and rationally connected to its purpose of protecting the confidentiality of intelligence information’.[78]
[78]Victoria, Parliamentary Debates, Legislative Assembly, 12 November 2008, 4565 (Rob Hulls, Minister for Racing).

As this discussion shows, the statutory context of the Racing Act reveals the legislature’s recognition — and its intention — that in order to ensure the integrity of horse racing, the exercise of the power under s 33 by the Commissioner may, in particular cases, necessitate a significant departure from the ordinary application of the rules of procedural fairness, in order to protect highly sensitive intelligence or investigative processes of Victoria Police. In the present case, as explained in the restricted section of the reasons, the information which the judge held should have been disclosed was of that character. Its disclosure would frustrate the purpose for which Parliament conferred the power to make an exclusion order.

We note, finally, that in the authorities which discuss possible public interest justifications for limits on procedural fairness, the public interest in the detection and prosecution of crime is usually listed along with national security as an interest meriting protection.[79] The same is true of listings of the categories of public interest which are capable of supporting a claim of public interest immunity, whether at common law or under the Evidence Act 2008.[80] It follows that the analysis undertaken by the Full Federal Court in Leghaei[81] in relation to national security information is applicable — by analogy — to the type of sensitive information with which we are concerned.
[79]See, eg, Al Rawi [2012] 1 AC 531; Secretary of State for the Home Department v MB [2008] 1 AC 440, 487 [62]–[63].
[80]See Ryan v State of Victoria [2015] VSCA 353 [56], [119]; Evidence Act 2008 s 130(4)(c); Eastman v The Queen (1997) 76 FCR 9, 65.
[81](2007) 241 ALR 141.

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14 October 2016